4-17 End of Day: A Lack of Bullish News and Technical Selling Weighed on Corn and Wheat
All prices as of 2:00 pm Central Time
| Corn | ||
| MAY ’24 | 430.25 | -0.75 |
| JUL ’24 | 441 | -1.75 |
| DEC ’24 | 464.75 | -2.5 |
| Soybeans | ||
| MAY ’24 | 1149.5 | 4.5 |
| JUL ’24 | 1164.25 | 4.25 |
| NOV ’24 | 1161.25 | 2.75 |
| Chicago Wheat | ||
| MAY ’24 | 537 | -12.75 |
| JUL ’24 | 552.25 | -12.5 |
| JUL ’25 | 627.25 | -6 |
| K.C. Wheat | ||
| MAY ’24 | 572.75 | -14.75 |
| JUL ’24 | 569 | -14 |
| JUL ’25 | 619.5 | -9 |
| Mpls Wheat | ||
| MAY ’24 | 633.25 | -5 |
| JUL ’24 | 639.25 | -5.75 |
| SEP ’24 | 650 | -5.75 |
| S&P 500 | ||
| JUN ’24 | 5072 | -20.5 |
| Crude Oil | ||
| JUN ’24 | 82.28 | -2.55 |
| Gold | ||
| JUN ’24 | 2392.2 | -15.6 |
Grain Market Highlights
- A lack of fresh news kept the corn market in a tight 3 ½ cent range for the day, with lower weekly ethanol production and lower wheat counterbalancing any positive influence from the higher soybean market.
- July soybeans saw a recovery from overnight lows in choppy trade to settle 5 ¼ cents off its high in a relatively tight 12 ¾ cent range. Support came mostly from higher soybean meal that saw support from higher basis values. Meanwhile, bean oil experienced marginal gains as it settled mid-range attempting to recover from recent weakness.
- Carryover weakness from lower Matif wheat futures and a general lack of fresh bullish news weighed on the wheat complex that saw technical selling in both Chicago and KC once prices breached yesterday’s lows.
- To see the updated US 6 – 10 day and 8 – 14 day temperature and precipitation outlooks courtesy of NOAA and The Climate Prediction Center scroll down to the other Charts/Weather section.
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Corn
Action Plan: Corn
Calls
2023
No New Action
2024
No New Action
2025
No New Action
Cash
2023
No New Action
2024
No New Action
2025
No New Action
Puts
2023
No New Action
2024
No New Action
2025
No New Action
Corn Action Plan Summary
From the low on February 26 to the high on March 12, May corn experienced a significant rally of nearly 40 cents. However, since then, it has consolidated within a narrow trading range, fluctuating mostly between 430 and 445. The size of Managed Money’s net short position, coupled with prevailing macro oversold conditions, suggests potential for further upside as we head into spring planting. While the recovery in corn prices may encounter obstacles, overall market conditions remain conducive to a continued price recovery into May and June.
- No new action is recommended for 2023 corn. The target range to make additional sales is 480 – 520 versus May ’24 futures. If you need to move bushels for cash or logistics reasons, consider re-owning any sold bushels with September call options.
- No new action is recommended for 2024 corn. We are targeting 520 – 560 to recommend making additional sales versus Dec ‘24 futures. For put option hedges, we are looking for 500 – 520 versus Dec ‘24 before recommending buying put options on production that cannot be forward priced prior to harvest.
- No Action is currently recommended for 2025 corn. At the beginning of the year, Dec ’25 corn futures left a gap between 502 ½ and 504 on the daily chart. Considering the tendency for markets to fill price gaps like these, we are targeting the 495 – 510 area to recommend making additional sales.
To date, Grain Market Insider has issued the following corn recommendations:
Market Notes: Corn
- Corn remains a follower of other grains as fresh news is lacking in the corn market. Wednesday’s lower prices saw continued choppy trade with a narrow daily trading range.
- The weekly ethanol production report saw ethanol production for the week drop 6.9% lower than last week and 4.0% from last year to 983 million barrels/day. Total corn used for ethanol production last week was 97.57 mb, which was light to meet the average needed to reach USDA targets. Current ethanol stocks are plentiful, running 3.15% over last year.
- The USDA will release weekly export sales tomorrow morning. Last week saw disappointing corn sales totals of 326,000 mt. The market will be looking for new sales to total closer to the 1.0 mmt mark. Current corn sales and shipments are trending well ahead of last year’s levels.
- A strong weather system followed by cool temperatures will likely slow the planting pace in many areas of the Corn Belt into the end of the week. Last week, corn planting was 6% complete nationally.
- The corn market may see additional selling pressure moving into the end of the month. Producers who hold basis contracts will need to price or roll those contracts by first notice day, April 30, for May futures. This could bring a natural selling environment into the weak market tone for the corn market.
Above: The corn market transitioned lead months from May to July making the chart look like prices have gapped higher due to the 11-cent premium to July. The market remains largely rangebound and a close above could allow prices to test the 495 – 510 area. If they break out to the downside and close below 421, they could slide further to test 400 – 410 support.
Soybeans
Action Plan: Soybeans
Calls
2023
No New Action
2024
No New Action
2025
No New Action
Cash
2023
No New Action
2024
No New Action
2025
No New Action
Puts
2023
No New Action
2024
No New Action
2025
No New Action
Soybeans Action Plan Summary
The USDA’s April Supply and Demand report failed to provide significant bullish data to prompt substantial short covering, as it mainly reflected recent demand challenges and an increase in ending stocks that aligned with the market’s expectations. However, Managed Money retains a considerable net short position near 139,000 contracts, as of the latest Commitment of Traders report. This could still fuel a short covering rally should complications arise during planting season, which has just begun. Otherwise, if weather conditions cooperate and planting progresses without major issues, prices could remain susceptible to revisiting recent lows throughout the spring.
- No new action is recommended for 2023 soybeans. We are currently targeting a rebound to the 1275 – 1325 area versus May ’24 futures to recommend making further sales. If you need to move inventory for cash or logistics reasons, consider re-owning any sold bushels with September call options.
- No new action is recommended for the 2024 crop. Considering the amount of uncertainty that lies ahead with the 2024 soybean crop, we recommended back in December buying Nov ’24 1280 and 1360 calls to give you confidence to make sales against anticipated production and to protect any sales in an extended rally. We are currently targeting the 1280 – 1320 range versus Nov ’24 futures, which is a modest retracement toward the 2022 highs, to recommend making additional sales.
- No Action is currently recommended for 2025 Soybeans. We currently aren’t considering any recommendations at this time for the 2025 crop that will be planted next year, and it may be some time before conditions are conducive to consider making any recommendations. Be patient as we monitor the markets for signs of improvement.
To date, Grain Market Insider has issued the following soybean recommendations:
Market Notes: Soybeans
- Soybeans ended the day higher but have trended significantly lower since the recent high, which was made on March 21. July futures are now down 76 cents from that point and are also only 24 cents above the contract low from the end of February. Both soybean meal and oil ended the day higher as well.
- Soybean sales estimates for tomorrow’s export sales report are between 250,000 and 400,000 mt. There were three flash sales reported last week to unknown destinations which will show up in tomorrow’s report. Export activity has been sluggish, attributed to the ongoing Brazilian harvest.
- In Brazil, soybean exports for April are projected to hit 13.74 mmt, up from the previous month’s 12.73 mmt. Sales for the 23/24 season are anticipated to reach 41.6% of the expected output, slightly lower than the 43% recorded in the previous year. Estimates for the country’s total production vary, with the USDA providing a high-end estimate of 156 mmt.
- Monday’s NOPA crush report brought positive news regarding the crush side, revealing that 196.406 mb were crushed in March, indicating robust domestic demand. However, the unexpectedly higher soybean oil stocks had a bearish impact.
Above: After closing below the 50-day moving average and 1168 support, the market is at risk of drifting lower and testing support between 1140 and the February low of 1128 ½. However, the market is also showing signs of being oversold, which can be supportive to a move higher. For now, initial resistance lies near the 50-day moving average of 1178 ½ with heavier resistance remaining near the recent high of 1226 ¾.
Wheat
Market Notes: Wheat
- Wheat closed lower across the board, with both Chicago and KC posting double-digit losses, despite some easing up of the US Dollar. Matif futures also settled lower on the day, even though the overly wet conditions in France and parts of Europe that are affecting the crop. With little fundamental news to support today’s move, it may be mostly technical in nature.
- Precipitation this week throughout the Midwest and the Plains will benefit both spring and winter wheat conditions. However, southern wheat areas like Kansas did not receive much of the moisture, which may keep their winter wheat crop conditions on the lower side.
- The International Grains Council reports that the May FOB price for Russian wheat remains at $210 per mt, exerting continued pressure on the US market. Furthermore, LSEG Commodities Research has revised their estimate for Russian wheat production to 89.8 mmt, a 1.6% increase from their previous forecast. This projection excludes wheat production from occupied Ukrainian territory, and the rise in production is attributed to favorable weather conditions, including warmer temperatures and adequate soil moisture levels, benefiting both winter and spring wheat crops.
- Iraq’s Minister of Commerce claims that the country is self-sufficient in food and wheat supplies for six months. Moreover, the Ministry of Agriculture anticipates a wheat harvest exceeding seven mmt. It’s reported that Iraq requires between 4.5 to 5 mmt of wheat annually to meet the needs of its 43 million people.
Action Plan: Chicago Wheat
Calls
2023
No New Action
2024
No New Action
2025
No New Action
Cash
2023
No New Action
2024
No New Action
2025
No New Action
Puts
2023
No New Action
2024
No New Action
2025
No New Action
Chicago Wheat Action Plan Summary
Since marking a fresh low in early March, Chicago wheat has traded mostly sideways, seeing limited upward movement due to overhead resistance. While the absence of bullish signals has been disappointing, managed funds continue to maintain a significant net short position. This suggests the potential for a short covering rally to emerge at any moment, especially as we enter the more dynamic part of the growing season.
- No new action is currently recommended for 2023 Chicago wheat. Any remaining 2023 soft red winter wheat should be getting priced into market strength. Grain Market Insider won’t have any “New Alerts” for 2023 Chicago wheat – either Cash, Calls, or Puts, as we have moved focus onto 2024 and 2025 Crop Year Opportunities.
- No new action is recommended for 2024 Chicago wheat. At the end of August, we recommended purchasing July ‘24 590 puts to prepare for further price erosion, and recently recommended exiting half of those puts to lock in gains and get closer to a net neutral cost on the remaining position. For now, we are targeting a market rebound back towards 675 – 715 versus May ’24 futures before recommending any additional sales. As for the open 590 put position, we are looking for prices between 475 – 500 versus July ’24 futures to before we recommend exiting half of the remaining July ’24 590 puts.
- No new action is currently recommended for 2025 Chicago Wheat. We recently recommended initiating your first sales for the 2025 SRW crop year as prices pressed back toward the mid-600 range to take advantage of historically good prices for next year’s crop. Since plenty of time remains to market this crop, we are looking for further price appreciation and are currently targeting the 690 – 725 area to recommend making additional sales.
To date, Grain Market Insider has issued the following Chicago wheat recommendations:
Above: Chicago wheat transitioned lead contracts from May to July, like corn and soybeans, and the premium in the July contract places it above the 50-day moving average, though general market weakness remains. If July ’24 closes below initial resistance near 548 ¼, it remains at risk of drifting further to test the March low of 523 ½. If 548 ¼ holds, and prices rally higher, they could still encounter resistance near the recent high of 574 ¾, and again in the 585 – 620 area.
Action Plan: KC Wheat
Calls
2023
No New Action
2024
No New Action
2025
No New Action
Cash
2023
No New Action
2024
No New Action
2025
No New Action
Puts
2023
No New Action
2024
No New Action
2025
No New Action
KC Wheat Action Plan Summary
Since the end of February, prices have been trading in a broad range, bound mostly by 555 on the downside and 605 up top, with little fresh bullish news to trade, while US exports continue to suffer from lower world export prices. Although, fundamentals remain weak. Managed funds continue to hold a considerable net short position, and the market is at levels not seen since spring of 2021, which combined could trigger a return to higher prices if unforeseen risks enter the market.
- No new action is recommended for 2023 KC wheat crop. Considering the current US export demand challenges and the sideways nature of the wheat market, we are looking for prices to return to the upper end of the recent range and are targeting the 600 area versus May ’24 to recommend making additional sales.
- No new action is recommended for 2024 KC wheat. Back in August, Grain Market Insider recommended buying July ’24 KC wheat 660 puts to protect the downside, and recommended exiting the original position in three separate tranches as the market got further extended into oversold territory to protect any gains that were made. The current strategy is to target 625 – 650 versus July ’24 futures to recommend additional sales.
- No action is currently recommended for 2025 KC Wheat. We currently aren’t considering any recommendations at this time for the 2025 crop that will be planted next fall. It may be late spring or summer before Grain Market Insider starts considering the first sales targets.
To date, Grain Market Insider has issued the following KC recommendations:
Above: Significant resistance remains within the range bound by the 50-day moving average and the March 10 high of 605 ¼. A close above 605 ½ in the July ’24 might pave the way for further advancement toward the congestion area of 610 – 640. Otherwise, should prices retreat below the initial support level of 561, there’s a possibility of testing the March low of 551 ½.
Action Plan: Mpls Wheat
Calls
2023
No New Action
2024
No New Action
2025
No New Action
Cash
2023
No New Action
2024
No New Action
2025
No New Action
Puts
2023
No New Action
2024
No New Action
2025
No New Action
Mpls Wheat Action Plan Summary
Since February, Minneapolis wheat has largely been rangebound, except for a temporary dip to set a new contract low, from which prices have recovered. Although a lack of bullish drivers and resistance from the 50-day moving average remain, historical seasonal trends typically strengthen as we approach late spring and early summer. Furthermore, managed funds continue to hold a substantial net short position, that potentially sets the stage for a short covering rally at any moment.
- No new action is currently recommended for 2023 Minneapolis wheat. The current strategy is to look for a modest retracement of the July high and target 675 – 700 to recommend more sales.
- No new action is recommended for 2024 Minneapolis wheat. Back in August, Grain Market Insider recommended buying July ’24 KC wheat 660 puts (due to their higher liquidity and correlation to Minneapolis), to protect the downside, and recommended exiting the original position in three separate tranches as the market got further extended into oversold territory to protect any gains that were made. The current strategy is targeting the 775 – 815 area versus Sept ’24 to recommend making additional sales. We are also targeting the 850 – 900 area to recommend buying upside calls to help protect any sales that would have been made.
- No action is currently recommended for the 2025 Minneapolis wheat crop. We are currently not considering any recommendations at this time for the 2025 crop that will be planted in the spring of next year. It may be late spring or summer before Grain Market Insider starts considering the first sales targets.
To date, Grain Market Insider has issued the following Minneapolis wheat recommendations:
Above: The April 11 close below 638 confirmed the reversal from the 50-day moving average the day before and suggests that prices may slide lower toward the April 3 low, with psychological support near 600 and the March ’21 low of 596 ¼ below that. If bullish input enters the market to turn prices back higher, overhead resistance may still be found in the 660 – 670 area.
Other Charts / Weather
